Sainsbury’s believes that helping farmers cut costs and carbon will help protect UK farming for the long term. Photograph: Sainsbury's

Cutting CO2 emissions across a giant supermarket chain is tricky enough. But how do you help the thousands of individual farms that supply your stores make cuts too? Sainsbury's carbon footprint initiative is doing just that and is also securing farmers' futures.

Britain's farmers have weathered recent tough economic times relatively well. But major challenges lie ahead and the need to secure a sustainable future for agriculture has never been greater.

That, at least, is the thinking behind a world-beating carbon footprint initiative pioneered by Sainsbury's.

Forming part of its 20 by 20 plan – an agenda of 20 ambitious sustainability targets Sainsbury's wants to achieve by 2020 – the scheme is already helping dairy, meat and poultry farmers identify ways to operate more efficiently and to reduce the environmental impact of their farms.

Covering 2,632 producers across seven food sectors, the initiative is being widened this year to include fresh produce and wheat.

Sainsbury's idea is that by helping its farmers cut both costs and carbon, it will help protect British farming for the long term and be able to meet one of its key 20 by 20 goals – securing a supply of quality British food at fair prices way into the future. The scheme is fully funded by the retailer.

The group has made significant progress cutting carbon across its own portfolio of stores. This initiative allows it to transfer some of the lessons it has learned to the suppliers it most depends upon.

It also creates a mechanism for the farmers themselves to share knowledge and best practice, gleaned directly from behind the farm gate, and to work together to make significant improvements in cost and environmental performance.

"They are doing a lot of work and it's incorporated in the core of the business. Tackling farming is difficult. Sainsbury's is doing an innovative thing and they are very genuine in what they do," said the Guardian judging panel.

Working in partnership with AB Sustain, the carbon measurement consultancy, Sainsbury's has developed on-farm carbon assessment tool that it believes is second to none in the world, in terms of scale and quality. It is the only such tool to achieve the exacting PA2050 standard, the highest tier of accreditation given by the Carbon Trust.

Work on the initiative began in 2007 within Sainsbury's Dairy Development Group, and has been progressively rolled out more widely to its cheese, beef, lamb, pork, chicken and egg producers.

What sets the system apart is the fact that it depends on direct, live measurements carried out annually by trained assessors on individual farms rather than a desk-modelling exercise.

Indeed, to make sure performance data gathered from individual farms properly reflects reality and is not skewed by one-off factors, measurements are taken over at least a three-year period.

Based on this data, improvement plans for individual farms are then drawn up. These provide farmers with practical steps they can take to achieve cost and carbon efficiencies covering a multitude of farm practices, from moderating use of artificial fertilisers, to calving intervals, better use of feeds, improved pasture regimes and other methods to increase yields.

For example a 5% improvement in milk yields was achieved by diverting farmers away from the use of carbon-intensive concentrate feeds and artificial fertilisers, in favour of better management of grassland and forage. Across the dairy group this has resulted in a saving of £310,000 on fertiliser and a saving of £11,154 per herd on feed.

A unique environmental scorecard is used as part of the carbon footprint assessment to identify where both cost and carbon savings might come from, bringing together production and environmental efficiency.

Sainsbury's has also worked hard to build the relationship between its own agriculture experts and farmers, and equal importance is put on bringing farmers together within their regions to share ideas and experience. Steering groups for each of the sectors have been set up, comprising regional reps and Sainsbury's own technical experts.

Regular regional meetings are held and there are workshops to help farmers implement recommended changes. Each farmer is also provided with a benchmark report so they can see how their own performance compares with that of their peers.

Sainsbury's claims some significant successes from the initiative, including one dairy farmer who achieved phenomenal savings of £65,000 in 18 months. Lamb savings in one year alone, it says, have amounted to 10,266 tonnes of carbon – equivalent to the emissions from 4,100 family cars.

The tight and collaborative focus of the carbon footprint initiative mean that the substantial £1.2m of savings achieved so far are all derived from direct Scope 1 emissions, without having to piggy-back other partners in the supply chain.

And this is something that particularly appealed to the Guardian judges.

Creating a mechanism through which farmers can work together to achieve change is clearly a tricky feat to pull off in a notoriously fragmented sector, where practices tend to be highly traditional.

One judge praised Sainsbury's boldness in tackling farming – "a hard sector". Another commented: "They go to the heart … and help to create new agricultural practices."

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